Fresh Blood Product Procurement

The National Blood Authority (NBA), funds the operations of the Australian Red Cross Lifeblood (Lifeblood), formerly known as the Australian Red Cross Blood Service, through a Deed of Agreement (Deed) with the Australian Red Cross Society (Red Cross). Lifeblood is an operating division of the Red Cross and not a separate entity.

Lifeblood is the sole supplier of fresh blood products in Australia and operates under the Deed as the Governments single provider of fresh blood products in Australia.

The inaugural three-year Deed commenced on 1 July 2006 and expired on 30 June 2016.

Negotiations for a new Deed between the NBA and the Blood Service were successfully finalised on 12 February 2016, and the new Deed was executed on 20 February 2016. The new Deed commenced on 1 July 2016 and continues for nine years until 30 June 2025.

The new Deed can be accessed through the following link:

Deed of Agreement (pdf) (807.88 KB)

The new Deed establishes a high-level legal framework in relation to national supply of blood and blood products. The Deed is supported by a Funding and Services Agreement (FSA) which outlines the commitments of governments to meet the fair and reasonable costs of Lifeblood for the collection, production and distribution of fresh blood products and services. The original FSA expired on 30 June 2019. A new FSA for 2019-20 to 2021-22 was executed on 28 June 2019, and commenced on 1 July 2019. Product unit prices are negotiated and determined prior to each funding cycle identified in the FSA.

The current FSA (2019-20 to 2021-22) can be accessed through the following link:

Funding and Services Agreement (pdf) (363.88 KB)

The FSA also describes the way in which blood and blood products are priced and outlines the methodology for payments from the NBA to Lifeblood based on an Output Based Funding Model (OBFM).

The OBFM for 2019-20 to 2021-22 can be accessed through the following link:

Output Based Funding Model (pdf) (381.73 KB)

The Deed, FSA and OBFM operate within an interrelated set of planning and process documents, each of which defines a particular aspect of the Australian national blood supply arrangements. This set of documents can be represented by the following diagram:

output based funding diagram

Lifeblood Expenditure

As demonstrated in the table below, the increase in fresh blood expenditure has progressively moderated over the last 10 years primarily as a result of improved efficiencies in Lifeblood operations, and in the last five years, a significant reduction in the demand for some fresh blood products due to improved appropriate use and reduced wastage.

TABLE: Fresh blood product expenditure – growth over last ten years

Year

Amount ($M)

% Growth

2009-10

456.1

9.3

2010-11

496.6

8.9

2011-12

526.3

6.0

2012-13

549.3

4.4

2013-14

583.1

6.2

2014-15

547.1

-6.2

2015-16

588.4

7.5

2016-17

582.4

-1.0

2017-18

620.7

6.6

2018-19

668.2

7.7

TOTAL

5,618.2

4.9 (average)

In 2018-19 Lifeblood achieved an operating surplus of $69.8 million through continued implementation of efficiency measures.

Lifeblood Performance - Statement of Expectations

The Statement of Expectations (SoE) for the Australian Red Cross Lifeblood for July 2013 to 30 June 2016 was approved by all Health Ministers. The new SoE for 2019-20 to 2021-22 will be published when approved by Health Ministers.

Lifeblood is required to report to Ministers on its performance against the SoE.